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Tesla buyers eye new EV bill that extends $7500 tax credit and removes 200k cap

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A bill to remove the 200,000-vehicle cap for electric car manufacturers and extend the $7,500 tax credit for new EVs until 2028 gained more supporters recently, with Rep. Darren Soto (D-FL) and Rep. James P. McGovern (D-MA) signing as cosponsors of H.R.6274, also known as the Electric CARS Act of 2018.

The Electric CARS Act of 2018 was initially proposed by Rep. Peter Welch (D-VT) on June 28, 2018, right at the time when Tesla was closing in on delivering its 200,000th vehicle in the United States. Under H.R.6274, the present $7,500 tax credit given to buyers of new electric cars would be extended all the way up to 2028. Electric car makers such as Tesla would also not be faced with the 200,000-vehicle limit that triggers a tax credit phase-out. Tax credits will also be given for the electric cars’ charging stations.

While a 10-year extension of the $7,500 tax credit is a welcome improvement over the previous system, what is really quite impressive with H.R.6274 is the fact that buyers of electric cars would be able to use the amount as a direct rebate for their vehicles upon purchase. This means that car buyers could get an immediate discount for their vehicle, instead of waiting until taxes are filed before receiving their electric car’s $7,500 tax credit. Such a system would make quality electric cars such as the Standard Range RWD Tesla Model 3, which is priced at $35,000 before options, attainable to an even bigger demographic.

When Congressman Welch unveiled H.R.6274 last June, he noted that the United States must transition to a form of transportation that reduces greenhouse emissions in the country.

“Transportation is the single largest contributor to greenhouse emissions in the United States. It is urgent that we transition to cleaner, more efficient modes of transportation. We are in a race for the winner of the technology for electric vehicles, and this credit is going to help spur that,” he said.

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Rep. Welch reiterated these points in a recent interview with Alex Guberman of YouTube’s E for Electric channel, where he discussed his motivations for H.R.6274. According to Rep. Welch, the demand for electric cars and a recognition for change in transportations is emerging, and the benefits won’t stop there.

“What I am seeing is, among some of my colleagues, a recognition that the people they represent want an electric vehicle. And, there is real potential job growth if we can give a boost to the electric vehicle industry,” Welch said.

The Electric CARS Act of 2018 currently has four cosponsors, with Rep. Darren Soto (D-FL) and Rep. James P. McGovern (D-MA) joining Rep. Jared Huffman (D-CA) and Rep. Jacky Rosen(D-NV), who supported the bill the day it was proposed. As of date, H.R.6274 has been referred to the House Committee of Ways and Means.

Tesla recently announced that it has sold its 200,000th vehicle in the United States this July. With the announcement, the $7,500 tax credit under the current system is now on a phase-out period, with buyers who receive their vehicles until the end of Q4 2018 being the final batch of Tesla owners who would be eligible for the full $7,500 tax credit. After December, the federal tax credit is set to be reduced by half to $3,750 from Q1 to Q2 2019, followed by another reduction to $1,875 from Q3 to Q4 2019. Under the current system, Tesla’s vehicles delivered after Q4 2019 would not be eligible for any tax credits at all. 

Watch Rep. Peter Welch’s interview in E for Electric in the video below. 

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Simon is an experienced automotive reporter with a passion for electric cars and clean energy. Fascinated by the world envisioned by Elon Musk, he hopes to make it to Mars (at least as a tourist) someday. For stories or tips--or even to just say a simple hello--send a message to his email, simon@teslarati.com or his handle on X, @ResidentSponge.

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Elon Musk

Tesla CEO Elon Musk’s $1 trillion pay package hits first adversity from proxy firm

ISS said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”

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tesla elon musk

Tesla CEO Elon Musk’s $1 trillion pay package, which was proposed by the company last month, has hit its first bit of adversity from proxy advisory firm Institutional Shareholder Services (ISS).

Musk has called the firm “ISIS,” a play on its name relating it to the terrorist organization, in the past.

The pay package aims to lock in Musk to the CEO role at Tesla for the next decade, as it will only be paid in full if he is able to unlock each tranche based on company growth, which will reward shareholders.

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However, the sum is incredibly large and would give Musk the ability to become the first trillionaire in history, based on his holdings. This is precisely why ISS is advising shareholders to vote against the pay plan.

The group said that Musk’s pay package will lock him in, which is the goal of the Board, and it is especially important to do this because of his “track record and vision.”

However, it also said the size of the pay package will enable Musk to have access to “extraordinarily high pay opportunities over the next ten years,” and it will have an impact on future packages because it will “reduce the board’s ability to meaningfully adjust future pay levels.”

The release from ISS called the size of Musk’s pay package “astronomical” and said its design could continue to pay the CEO massive amounts of money for even partially achieving the goals. This could end up in potential dilution for existing investors.

If Musk were to reach all of the tranches, Tesla’s market cap could reach up to $8.5 trillion, which would make it the most valuable company in the world.

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Tesla has made its own attempts to woo shareholders into voting for the pay package, which it feels is crucial not only for retaining Musk but also for continuing to create value for shareholders.

Tesla launched an ad for Elon Musk’s pay package on Paramount+

Musk has also said he would like to have more ownership control of Tesla, so he would not have as much of an issue with who he calls “activist shareholders.”

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Investor's Corner

Barclays lifts Tesla price target ahead of Q3 earnings amid AI momentum

Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.

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Credit: Tesla China

Barclays has raised its price target for Tesla stock (NASDAQ: TSLA), with the firm’s analysts stating that the electric vehicle maker is approaching its Q3 earnings with two contrasting “stories.” 

Analyst Dan Levy adjusted his price target for TSLA stock from $275 to $350, while maintaining an “Equal Weight” rating for the EV maker.

Tesla’s AI and autonomy narrative

Levy told investors that Tesla’s “accelerating autonomous and AI narrative,” amplified by CEO Elon Musk’s proposed compensation package, is energizing market sentiment. The analyst stated that expectations for a Q3 earnings-per-share beat are supported by improved vehicle delivery volumes and stronger-than-expected gross margins, as noted in a TipRanks report.

Tesla has been increasingly positioning itself as an AI-driven company, with Elon Musk frequently emphasizing the long-term potential of its Full Self-Driving (FSD) software and products like Optimus, both of which are heavily driven by AI. The company’s AI focus has also drawn the support of key companies like Nvidia, one of the world’s largest companies today.

Still cautious on TSLA

Despite bullish AI sentiments, Barclays maintained its caution on Tesla’s underlying business metrics. Levy described the firm’s stance as “leaning neutral to slightly negative” heading into the Q3 earnings call, citing concerns about near-term fundamentals of the electric vehicle maker.

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Barclays is not the only firm that has expressed its concerns about TSLA stock recently. As per previous reports, BNP Paribas Exane also shared an “Underperform” rating on the company due to its two biggest products, the Robotaxi and Optimus, still generating “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” BNP Paribas, however, also estimated that Tesla will have an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040, and more than 11 million FSD subscriptions by 2030.

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Investor's Corner

BNP Paribas Exane initiates Tesla coverage with “Underperform” rating

The firm’s projections for Tesla still include an estimated 525,000 active Robotaxis by 2030.

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Credit: Tesla China

Tesla (NASDAQ: TSLA) has received a bearish call from BNP Paribas Exane, which initiated coverage on the stock with an Underperform rating and a $307 price target, about 30% below current levels. 

The firm’s analysts argued that Tesla’s valuation is driven heavily by artificial intelligence ventures such as the Robotaxi and Optimus, which are both still not producing any sales today.

Tesla’s valuation

In its note, BNP Paribas Exane stated that Tesla’s two AI-led programs, the Robotaxi and Optimus robots, generate “zero sales today, yet inform ~75% of our ~$1.02 trillion price target.” The research firm’s model projected a maximum bull-case valuation of $2.7 trillion through 2040, but after discounting milestone probabilities, its base-case valuation remained at $1.02 trillion.

The analysts described their outlook as optimistic toward Tesla’s AI ventures but cautioned that the stock’s “unfavorable risk/reward is clear,” adding that consensus earnings expectations for 2026 remain too high. Tesla’s market cap currently stands around $1.44 trillion with a trailing twelve-month revenue of $92.7 billion, which BNP Paribas argued does not justify Tesla’s P/E ratio of 258.59, as noted in an Investing.com report.

Tesla and its peers

BNP Paribas Exane’s report also included a comparative study of the “Magnificent Seven,” finding Tesla’s current market valuation as rather aggressive. “Our unique comparative analysis of the ‘Mag 7’ reveals the extreme nature of TSLA’s valuation, as the market implicitly says TSLA’s 2035 earnings (~55% of which will be driven by Robotaxi & Optimus, w/ zero sales now) have the same level of risk & value-appropriation as the ‘Mag 6’s’ 2026 earnings,” the firm noted.

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The firm’s projections for Tesla include an estimated 525,000 active Robotaxis by 2030, 17 million cumulative Optimus robot deliveries by 2040 priced above $20,000 each, and more than 11 million Full Self-Driving subscriptions by 2030. Interestingly enough, these seem to be rather optimistic projections for one of the electric vehicle maker’s more bearish estimates today.

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